Back to top

Real Time Insight

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

The equity market has turned in a strong performance so far this earnings season.  From the day before Alcoa’s release to yesterday’s close, the SPDR S&P 500 ETF (SPY - ETF report) is up just short of 3.6%.   Benchmarking SPY’s historical performance to Alcoa earnings release, the S&P 500 has traded strongly relative to the 5, 10, and 15 year averages.

Although the market has started the earnings season on a bullish note, historically it has started to find headwinds somewhere between 8 and 10 days after Alcoa’s release.  Performance has been stronger in recent years than the past.  Traders have a lot to think about in the last half of July given the cocktail of news.

The economy seems to be lifting:

At the macro level, the economy seems to be finding firmer footing.   Both the Empire and Philly manufacturing surveys displayed strength rising 1.62 to 9.46 and 7.30 to 19.8 respectively.  The Philly reading was the highest since the spring of 2011.  At the same time the average of the two employment indices rose to 5.48 up from -2.7 in June, displaying improved labor demand in the manufacturing sector.  The average was the best since July 2012 (6.91).  Moreover, unemployment claims were a low 334,000 in the BLS payroll survey week, and the July NAHB survey surged 6 to a new cycle high 57.

Corporate news has something for bulls and bears:

At the corporate level, news flow has been mixed in the recent days.  Microsoft (MSFT), Intel (INTC), Google (GOOG ), and eBay (EBAY) have disappointed investors, but financials have been a positive given results from Goldman Sachs (GS), Morgan Stanley (MS), JP Morgan (JPM), Wells Fargo (WFC), and Citigroup (C).  Industrial like General Electric (GE), Ingersoll Rand (IR), and Honeywell (HON) look to have posted positive earnings for the quarter.   

Investors like the market:

Turning to sentiment, investors have embraced the market.  Lipper reported that all equity funds saw an inflow of $16.6 bln in the week ending July 17 after an $11.8 bln inflow the week prior.  The American Association Individual Investors’ Sentiment Survey displayed optimism with the spread between the bull and bear indices over 20 for a second week.  In the options market, the CBOE’s Composite Put to call ratio fell to a low 0.74 Thursday suggesting investors are getting more comfortable with the rally.  

My questions for you:

Is profit news and signs of an improved macro backdrop strong enough to power stocks higher into the end of July?

Is sentiment building to a level which signals a short term overbought condition?
 

I’d love to hear your thoughts!

Nick

5 Stocks to Double in 2014

Today, you are invited to receive a free Special Report from Zacks Investment Research. It reveals five companies that could gain +100% and more in the next 12 months.

One is set to ride a little-known All-American energy boom. Another is a chip maker looking for big gains through Google Glass. Another could be the next alternative energy "Tesla."

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ANI PHARMACE ANIP 29.57 +15.73%
ALLIANCE FIB AFOP 17.94 +3.58%
ATLAS FINANC AFH 14.67 +3.02%
GENTHERM INC THRM 36.59 +2.05%
FEDERATED NA FNHC 20.26 +1.96%